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tv   Countdown  Bloomberg  August 23, 2016 1:00am-2:31am EDT

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anna: life after brexit. german, french, and italian leaders lay out their view on the way forward. europe is not the cause of all of the problems, but the solution. >> many thought after brexit, europe was over. it is not true. i want to write a future chapter. anna: clinton versus donald trump. they continue to battle it out. calls for a special prosecutor to investigate clinton's e-mail scandal while clinton criticizes donald .rump's tax plan
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has brexit shaken the foundation? we speak to the ceo at 7:00 a.m. u.k. time. a very warm welcome to countdown. we are live from london. it is 6:00 a.m. here in london. a quick look at what is happening. the asian equities session is underway, fairly flat. weakness coming in through some oil related asset classes. let us look at the risk radar. oil prices weaker, down by 1.3%. weakness across the oil markets meaning the asia-pacific energy is down for the fourth day. prospect of increasing crude supplies.
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we talked about that story coming out of iraq. prices are retreating from a seven-week high. we talked about this a lot yesterday and last week with regards to the hawkish commentary coming in from fed officials. a little bit of a retreat from the highs we saw yesterday as we focus in on jack -- jackson hole where janet yellen will be speaking on friday. the fed needs to consider the cost of leaving interest rates low. we will talk more about that team as we go through the program. in new zealand dollar, a fairly sizable move, up as much as 0.8%. the governor has been talking about how they intend to decrease rates to boost inflation but rapid cuts are not justified because it will put upward pressure on the new zealand dollar in the overnight
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session. let us get to bloomberg first word news. trump has called for the appointment of a special prosecutor to investigate what he calls hillary clinton's stemming from her tenure as secretary of state. speaking out in ohio, donald trump focused on clinton's use of a private e-mail server and her paid to play actions of the clinton foundation. significanthe number of times it was done require an expedited investigation by a special prosecutor immediately, immediately, immediately. clinton'sle, hillary presidential campaign says donald trump's proposals to overhaul the federal tax system would benefit high in best are's like himself. donald trump's plan means
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taxpayers will be paid to run up debt. chief economic officer it says they need to consider the cost of keeping interest rates low. there is financial instability down the road because of extraordinary monetary policy. that was the strongest argument to slowly normalize rates wasuse otherwise, the fed contributing to excessive risk taking. investors in japan are having to deal with a new where, the country's $1.3 trillion government pension investment want has become the owner of the to be she and more than 100 other tokyo listed firms. taken together with the stock buying of the bank of japan, the holding shows the growing power of state investors in the market. >> what a strange, perverted, and quite dangerous is the bank
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turning which has been the stock market into a super barrio index. it is printing $60 billion a year of monopoly money to go and buy equities. if that was not bad enough, it is buying particularly in the nikkei index. it is grotesquely now formed. the most important sectors for profits which are autos and banks, are very underweight in the nikkei. >> tokyo is claiming up after the first typhoon to make landfall in the area in 11 years. the storm was classified as a category one storm. airport was forced to suspend operations when a control tower was evacuated and the japan airlines canceled 337 domestic flights. more than 70,000 passengers
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faced delays. all of his is losing endorsements after he admitted to making up is tori about being robbed at gunpoint while at the real olympics. speedo usa and air we've says says theyr weave are ending the relationship with ryan lochte. global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. you can find more stories on the bloomberg go. juliette saly has details for us. the oil price is very much in charge, setting the agenda and setting the tone for overnight trading. were saying you earlier, we are seeing the weaker oil price weighing on the energy sector, the worst
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performing sector, down by 1%. they have been fluctuating, the asian stocks. some weakness coming through the nikkei in afternoon trade. it did have a bit of a rally and our ago. the yen is starting to strengthen. down by 0.7% but it is a waiting game. waiting for janet yellen's speech on friday. investors have been treading water a little bit. a good rally in australia in the latter part of trade, up by 0.8% despite the weakness in the oil stocks and in hong kong which is also heavily energy-based. petro china is weighing on that index, down by 0.4%. a little bit on the upside for the shanghai composite. .esterday, it fell almost 1% a little bit of buying coming through there.
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korea is a little stronger but southeast asia is being sold off today. there is some company news regarding earning season in australia. entered --australian engineering and construction business. it's for your profit missed estimates and it sees challenging markets ahead. . and han ono pharma jin shopping -- shipping plans to submit a new restructuring. some do virgins in asian markets coming through today. divergence in asian markets coming through today. angela merkel spoke
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alongside her counterparts in a news conference as assad to chart the way ahead. timeframe for a new for eu integration. thought after brexit that europe was over but it is not true. we respect the british people's choice but i want to write a future chapter. and that is why the fight for common defense, intelligence, better integration of the they arendustries -- all absolute priorities on which we will discuss. anna: let us get more on the story. caroline hyde joins us from berlin. good morning. a future chapter being called some cleartaly but divisions on the way forward. to be a: this was meant show of unity, standing together
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and steeped in symbolism. this entire meeting. they went to visit the grave of an anti-fascist writer who put together a pro european manifesto. show how you can dismantle nation states and have a federal state of europe. they do have common concerns about terrorism. about the path forward. common concerns about the rise of populist parties and the right-wing parties growing stronger in germany and in italy and france. this was a sign of it unity. trying to show that they can carve a way ahead. september 16, all of europe will meet in bratislava. the meeting showed the divisions. between italy and germany. italy is still trying to tackle its growing debt problems with
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its bank and carve a future for growth while germany is still wanting to see discipline and staying within eu boundaries of fostering growth. divisions in the way forward for growth. france calling for more spending. that is not something germany tends to like. a mid-the signs of growth and unity, there are still divisions. angela merkel spoke about remembering that the eu is a group of divided nations. have a listen. >> as much as we like brussels, we can come again and again for a visit to -- to individual member states to inform ourselves and to make sure -- and to make clear that there is diversity. caroline: angela merkel there. anna: she has a busy week ahead of her. how many it european leaders -- how many european leaders will she consults with?
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caroline: 13. she has a whistle top -- whistle stop tour. they are hoping to come together and have a common focus going forward before they meet september the 16th. no fewer than 13 leaders from wednesday until saturday. she will be out there trying to find common ground so we can see the eu prosper and see growth. she wants to work towards a showing that it was the uk's .oss of left the eu i think it was symbolic that they stood aboard that boat that goes out to save refugees in which is a key concern for the eu as they go forward. let us bring in another
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voice to the conversation. our guest, marcus settlement -- saddlemen. trying toeaders emphasize the benefits that europe brings and faced down the skeptics. how did they do? >> the main reason for meeting this week was to show unity to the rest of europe and beyond and to repair for bratislava in september and to iron out some of the differences -- and to for bratislava in september and to iron out some of the differences. they had a discussion regarding economic policy with italy pushing for fiscal flexibility. migrationersations on .hich is another divisive topic and they can show unity with
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clear action along security policy and education policy. two challenging topics and are relativelyy aligned on. i imagine that this was the conversation. anna: where do you see the biggest challenges? caroline was talking about the symbolism of meeting on this island. rather than the divided europe that the skeptics would like to talk about. theve this map which shows highest areas of political risk. focusing on italy including the constitutional referendum that will take place in october. is that where the concern is focused for you? >> the map illustrates that there are a lot of challenges to
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medically for european leaders including the three that met this week. this is ray much on their minds and constraints -- this is very much on their minds. in the midst of that, as an investor, how do you read the story at the moment? without the brexit story, europe has been recovering nicely, slowly but recovering from the financial crisis. we look at the pmi due out later today, 53 is expected on the composite. during for growth the next six months. the focus is on germany. one of the developments everyone has been looking towards is domestic demand in germany continuing to revise. for the first time in 20 years, we are seeing a booming property
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market in germany which is a good thing. we have also seen across in europe, more positive and real wage growth than we have seen for a long time. these are all indications of stability if not a more positive growth outlook in europe but it all depends on germany. anna: you have some positive things to say about wage growth and the prospect forward. we will talk more about that as we go through the hour. here are some highlights of your day ahead. tuesday, we have a series of pmi data. midday, interest rate decision in turkey. three hours later, it is u.s. new home sales data. the world's largest pension fund reveals its investment secrets. blue skies blue
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for oil. china orders a slowdown in factories. another cut could be coming. we preview turkey's rate decision. this is bloomberg. ♪
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anna: welcome back. you're looking at a live shot of a hong kong harbor. seng is down by today was almost entirely flat. let us get the bloomberg business flash. blackrock is betting on emerging markets. the world's largest asset manager has upgraded developing nations stock from neutral. last month, the outlook was in bonds. blackrock sees more room for in
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inflow.-- in easing concerns on the pace of the fed's rate hike. has one investor that is betting bigger on his turn around. it has increased its stake in switzerland's second-largest bank to more than 10%. restructured businesses to shift away from security trading. the company has lost about 45% of its market value this year. person has richest hit a new high. bill gates has $14 million more than the number two on the index, ortega. his net worth is equal to half a percent of the u.s. gdp. that is your bloomberg business flash.
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the investment secrets of the world largest pension fund has been -- have been revealed for the first time. the japanese investment fund is a top owner of a honda, it to be she, and more than 100 other tokyo listed firms. good to have you on the program, anna. what are we seeing from this analysis by bloomberg? the government's ownership of big corporate's in japan. as we know, this is the world's biggest pension fund and they have $1.3 trillion. 25% of which is allocated in japanese stocks. we are at a new that they were -- we already knew that they were a huge part of the market. for the first time though, we have details on how much they own and what they own. we can work out where they stand
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as a shareholder in each company. they are passively managed. we knew they would roughly mimic .he topix that they are the number one shareholder in at least 120 companies. a reminder of how big they are in the market. anna: a reminder of what a big player they are. when the boards of those companies meet, how much do they have to be mindful of this big new shareholder in their midst? what kind of influence we have --do we expect this pension fund have on these companies? hire a lot of managers. to, in ordern able
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to increase in proof to governance in japan, they are trying to improve dialogue between the managers and the companies. they are trying to find out how useful the fund managers are being. concern on the industry side as well where the business lobby has been saying -- should the state be that influential in the market? on the fiduciary side, they have to push companies for better returns. they are gradually in a softer approach trying to make their managers do that. a do have a big influence in a lot of these companies. they own 5% of that for example. thank you very much.
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marcus is still with us in the studio. the japanese stock market is now a super marielle market because of the involvement of the boj s.ying uts -- etf the policy of the fund is very much passive. indices andplicate some are very inefficient. during the last couple of years, have been created that are more efficient. but they also expressed japan's journey on the way to more corporate governance. the nikkei 400 is a better constructed index than many large -- that many large investors are working towards. away frome staying
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that particular well-known index. what about innovation in central banking policy? the bank of japan was one of the first to have their toes in negative interest rates. yesterday, the boj talked about of the bojchance taking action. what are you expecting? >> we have been looking forward to local investors putting more money to work. we have seen a huge share in by thees listed in japan largest pension funds. at the same time, as a percentage of the total, it is still a relatively small amount. we need a move towards broader investment i local investors in japan. is largely driven by foreign investors. for that to happen, growth needs to fully recover. that takes us back to monetary -- fiscal policy.
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anna: i know you think we need more of the other arrows. up next, we will talk about china and their preparations. ♪
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anna: welcome back, everybody. you are looking at live shots of tokyo. the dollar-yen at 100.17. we were talking about the prospect for further easing from the bank of japan. a new edition of daybreak is available on bloomberg and mobile. let's take a look at some of the top stories we are leading with. the cover story on daybreak ships from the deck of the that has been rescuing migrants trying to flee across the mediterranean. it is i teltalian.
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other eurosng these in leaders as they tried to -- leaders as they try to chart forward in the post brexit economy. we will talk about the way forward for the eu project. federalism, integration wins over the skeptics that has been growing louder. one of the other stories is the news that south africa's anc has lost control of johannesbe rg after the mayor was elected for the nation's economic hub. this is following from the anc losing control of pretoria. fadinging fortunes, political clout of the anc in daybreak. daybreak looks ahead to the
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europe pmi which should provide an indication if brexit is affecting businesses in the monetary union. that is one of the biggest focuses. ing of that data, joining us with a preview of pmi num bers is our correspondent. good morning. >> pmi is what everybody is focusing on this morning. any cop as it number for the eurozone as a whole and germany and france individually -- this will be watched for any economies and businesses are faring after the brakes we had in june. take a look at the three cop as it pmi's. germany at the top and then france. these numbers remain resilient in july even amongst the risk of brexit and the risk that went into the vote. some data of july, these numbers remain resilient, but we have to
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keep reminding ourselves we have had not all the hard data yet. that is what august will be closely watched. those numbers are dropping at 8 a.m. and then we get germany 30 minutes later and that 9:00 am of the eurozone as a whole. anna: thank you,. . advisors chief economic says feds need to consider the cost of keeping interest rates low. he says the risk of financial instability down the road because of extraordinary monetary policy. he says that is the strongest argument for china to slowly normalize rates because otherwise the fed is contributing to risk-taking. markus is still with us in the studio. let's talk about the fed, where the fed goes from here. el-erian talking about how we need to normalize policy slowly
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because otherwise we encourage risk-taking. do you share his views? markus: i do in the context of improving growth in the u.s. if we consider well-known central banking rules about setting interest rates, we observed with those rules and models that interest rates in the u.s. are too low. why have not they risen further from the first decision in december to get on track with rising interest rates? the u.s. dollar has been very firm and it is part of the financial conditions, monetary conditions in the u.s. because the dollar has kept on rising, there is no need necessarily to put interest rates higher for the last six months. anna: financial conditions tightening through the dollar but not the interest rate picture. we talked about how the dollar was increasing every time we saw one of these hawkish fed comments coming in last week and
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yesterday. not pushing out the dollar, but it seems like the interest rate market, treasury yields are unmoved. treasury yields staying down even though they climb through a rate hike. not seeing much movement in the u.s. 10 year yield. does that make sense to you, making this hawkish commentary? markus: we have to bring in another element of the current regime which is the savings. we have an oversupply of savings, more than any else going for the bond market in conservative investment and bring that interest rates. since you mentioned yields on 30 year bonds in the u.s., the yield is now lower than the average dividend yield of s&p 500 companies for the first time in its long history. i think this shows where we are, where we have come to with savings and current monetary policy regime and it is a
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challenge for policymakers. is pointing out we need to return to more normal conditions and the economic environment being slightly more positive than the first half of the year sets the scene for another interest rate rise. anna: dividend yields will look attractive compared to what we are seeing in bond markets. what does that suggest to you as an investment strategy? getting more involved in those dividends or do we have to ask yourselves questions about how sustainable they are or if that is the kind of risk-taking el-e rian is talking about it markus: i think we are clearly at the end of the 30 year bond market in bonds. maybe it takes a little while to realize for yields to turn around and the u.s. might again lead in that respect, but also it points to the fact exithey are a relatively good buy.
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not attractively valued in the u.s., but globally speaking, equities are the class to be allocating to. anna: we're witnessing the end of the bond bubble, you think. we have heard people saying that for years. bill gross has been saying that for a long time this is coming to an end. markus: absolutely. we have been talking a lot about risk recently. as we spoke about europe and the elections coming in the next 18 months, if we see an unexpected development politically, then clearly people would put money in the bond market. i would not say next month is the 35 year low, but we are in that phase that at some point yields will hit the low. reallyg-term investors, this means we should not put money to work in the bond market
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anna anna: thank you. oil could be facing dark clouds as china prepares to clean up its skies ahead of the g-20 market next month. yousef can explain all of that. issef: anna, what it means some countries go the extra mile blue skies but it has implication on the demand side of the oil market equation. china is preparing for the g-20 summit in early september. companies to255 curb activity to make sure the skies are going to be blue that day. we put this up on a chart for you. get some perspective. what you are looking at is chinese coal and oil imports. we have highlighted precendent. in 2008 at the olympics, china
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moving on coal mines and that caused the supply shortage of fuel. iron slumping on the back of a decision to suspend production of steel mills. this latest development, as simple as posting it on the website of the environmental protection bureau. this could cut petroleum demands by some 250,000 barrels a day in the third quarter. remarkable how going the extra mile can really disrupt the market. anna: we could see reduced amounts for oil as a result of china's attempts to clean up its skies as it welcomes the g-20. yousef, thank you very much. markus is still with us. where do you stand on the chinese growth story at the moment? this time last year, we were
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transfixed with what they were doing with their currency and that was causing huge ripple effects across global markets. the chinese are more quietly handling their currency move thi a positive.ssibly markus: absolutely. it shows monetary policy is working in china at their perspective. demand is healthy which is a good sign. consumption drives the economy, therefore less concerns than a year ago about hard landing in china or recession. your views onut china and its role in the global economy. i read your comments where you talk about the biggest plus could be sustained real wage growth. trends overig macro multi-decades of development. our week near the end of that? -- we near the end of that?
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markus: it has taken more than 20 years for that development to happen. it was recently helped by the working compilation of developed countries like germany and italy peaking, therefore needing more capacity from that perspective, from other countries. that also means the trend in rising inequality globally is possibly coming to an end now this sets us up for more healthy wage growth going forward so people in the population globally that possibly have not seen as much, as many rises in salaries as they should have over the last 10, 15 years. we are going through a friendly period wages adjust to the levels they should be. anna: do we not go into absorbing other regions into the economy? what europe has done, africa and
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other parts of the globe with lower wage economies who will be counting with business. markus: absolutely. one thing to bear in mind is of need a certain level expectations to this be absorbed and certain african countries are not there. china is a giant. there are only so many in the world. i don't imagine the same development happening again. bear in mind, eastern europe, china opening at the same time at the end of the 1980's, beginning of the 1990's -- with one go, it brought more than one billion workers to the global labor market. anna: how long until this transformation concludes because it sounds as if all the calls we are hearing from popular politicians in the u.s. and europe?
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markus: the trend we have been monitoring closely in china is how many people continue coming from rural areas to the cities. we see that trend slowing dramatically, because it has to at some point. agriculture in china has been deemphasized for decades and china has been industrializing. i think the trend is still ongoing but at a slower rate. fewer people are coming to the cities which shows us chinese labor force potential is starting to become lower and lower. therefore, the labor market, a global labor market will not absorb many more workers from china. anna: thank you very much for sharing your thoughts. markus stadlmann joining us on countdown. coming up, we preview turkey's rate decision live from
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istanbul. will earnings be on solid ground or is brexit taking their foundation? we speak to the ceo of pers immon. 15 minutes later, the german chancellor's message to the u.k. we discussed the meeting between merkel and hollande. this is bloomberg. ♪
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anna: welcome back. a.m. if you are watching in new york. that is a live shot. is asian equities sector flat in the last half hour or so. around an hour ago, we were to tens of a present higher and now we are entirely flat on that asian benchmark. let's go to hong kong with shery
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with the bloomberg business flash. shery: thank you. black rock is betting on emerging markets. it has upgraded developing nations' stocks from overweight to neutral showing stability in the dollar. last month, and raised its outlook for emerging market bonds. blackrock sees more moves in the emerging markets index which has risen for a third straight month because of rebounding commodity prices. has one invested that that's bigger on his turnaround. it has increased it by more than 10%. since taking over last summer, thiam has restructured businesses to go away from security trading. the company lost 45% of its
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market value this year. isired nba star kobe bryant swapping basketball for wall street. a $100 million fund to invest in media, tech and data. it will be co-managed by steph jeff. it is going public now. one of the richest men has hit a new high. atl gates's fortune $90 billion . the microsoft cofounder's net worth is equal to half a percent of u.s. gdp. that is your bloomberg flash update. anna: thank you. turkey's central bank is expected to cut its overnight lending rate by 25 basis points to o 8.5%.
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constantine joins us now from is fumble. istanbul. what about inflation which has been climbing for a couple of months now? what are the challenges for policymakers? constantine: inflation is one of the things the market will be looking at today, especially the wording of the central bank's statement. it is worth pointing out the jump in inflation last month was driven largely by food prices and that remains extremely volatile in turkey. this was flagged by the central month last month and they say they expect this, inflation to moderate, to slow down in the coming months. the other thing is they have stripped out volatile food prices. core inflation remains unchanged. so, given the loose liquidity and the challenges the growth we
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are seeing, early signs of a slowdown, this central bank may feel it has room to cut this but the jump -- despite the jump. anna: this comes in the wake of the failed coup attempt and the turmoil that caused. inflation and cut the outlook to negative. does this weigh on the currency? constantine: whatever decision is made and however the lira reacts -- it is worth pointing out the market looks like it is priced at a 25 basis point cut. that is what the surveys indicate and what swaps in the lira show. whatever the decision today is, tension will go back to the rating agencies and this will continue to weigh on turkish
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assets because turkey stands to lose its investment rating if moody downgrades. anna: thank you very much, constantine. joining us here on set in mike bell, labor market strategist from jpmorgan. great to have you on the program with us. wee us your thoughts as brought this conversation into emerging markets. what do you make of where turkey is at the moment? interest rate decision coming so soon after the military coup and the negative commentary from rating agencies. do you see a continuation of the cycle? mike: we think it might be cut 8.5%, but we are relatively constructive on the growth outlook in turkey. it does not seem to have bled
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through the leading economic surveys. the consumer confidence seems to be holding up well. given turkey's growth has been driven entirely by consumption over the last few years, that should support 3% this year. anna: there were high hopes after the demise -- they don't command quite the headlines that they used to and the environment has changed. many investors have moved on to countries. where do you stand on what the best way to get exposure to that type of investment story? out becausewidening you have seen a sharp fall in tourism. that happened prior to the coup, but you have not seen a shock since the coup. it is not seem to be having a next her impact. more broadly within the emerging markets, we like the new china
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story, the consumption story within china as opposed to the manufacturing company. we think it has room to grow for disposable income for chinese growth over time. anna: let's talk about emerging markets. we heard from shery about blackrock upgrading its commodities outlook. i have a chart to show the benchmark gauge, jumping 15% in the past three months. good time to get broadly involved or be selective or your preference is for china? mike: you certainly have to be selective. you need to be selective with the em. we are in a broad level moving from having been underway to a neutral position. we have some concern around the fundamentals in certain parts of the bm, but we think the fact the growth differential between the emerging markets and the developed markets stabilize
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perhaps even next year. you may see a pickup in relative terms. that should support emerging markets. anna: that should support them. what about what the fed does from here, how does that play into your expectations around emerging markets? what do they want to see on the dollar and interest rate? mike: the strong dollar is bad for the relative performance of emerging markets. if the fed need to significantly increase interest rate faster than the market can expect, that will be bad for the emerging market. we think the likelihood of that happening is slim. nevertheless, it is a risk factor. anna: that takes us to the conversation about the fed. how quickly do you think interest rates will go up, looking ahead to the jackson hole meeting. i have seen different interpretations. some suggesting it will be immediate fed policy what they do in september and this year,
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how many rate hikes are remaining. others suggesting it will be more on the global picture of longer interest rates and away from the domestic and u.s. agenda. mike: i think what you are likely to see this week's more discussion around monetary framework and talking about the long-term interest rates where they think you will end up with interest rates and less focused on the short-term. i think the confusion you have seen recently over various comments from members of the fed emanates from the fact that several members want to be increased in the short-term interest rate, but where they will go to his lower than what the economy is saying. anna: the conversations get confusing around interest rates, where they should be in the short-term and the final path. interesting stuff. mike bell from jpmorgan. next, brexit. will the eu referendum vote affect persimmons?
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the ceo is joining us next on countdown. a lot to talk about about how much seeing they are seeing from buyers at the moment in the u.k. housing market. this is bloomberg. ♪
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anna: life after brexit. merkel, hollande meet. the italian leader says it is a solution to the region's problem. >> many thought after brexit, europe was over. it is not true. we respect the british people's choice but we want to write a future chapter. anna: the two presidential candidates continue to battle it out. the republican nominee called for a special investigation on clinton's e-mail s candal. will persimmon's earnings be on solid ground or has brexit
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shaken their foundation? we speak to the ceo, jeff fairburn. ♪ anna: very warm welcome to countdown. i'm anna edwards. it is 7:00 in the morning which means we are getting breaking news from u.k. corporate persimmon. let's talk about their numbers. 2rofits coming in at 35 million pounds, an increase from the previous year. it encompasses the first half of the year so maybe backward looking for anybody looking for any story around brexit and the housebuilder. when we speak to the manager of the company, we will get a gauge of what inquiries are like right now, what kind of transactions they are seeing at persimmon in
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the housebuilding sector. a lot to talk to him about. we are ready to talk with them now. jeff fairburn is the ceo of persimmon. great to have you on the program with us this morning. just getting a first look at your numbers, an increase in pretax numbers in the first half. try to contrast what you saw in the first half and what you are seeing right now in the housing market. jeff: it is interesting. we started the year quite strongly and there was a slight slowing down towards the brexit vote. since then, it has been very robust. we are seeing good numbers at 20% in the last few weeks. up 17% so re artee trading is good at the moment. anna: give us more detail on what period they refer to. it sounds like a post brexit statistic you are giving us.
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a little more detail on that and how it is translating to transaction volume. jeff: we have about 380 developments around the country in the u.k. we don't sell in central london but we are in the rest of the u.k. and we are seeing good levels of interest. we do focus on the affordable end of the market. our selling price was 200-6000 pounds. 6,000 pounds. affordability is a key issue. i think we are seeing our buyers for the market, first-time buyers, keen to buy. we are seeing good interest. we opened a number of new outlets over recent weeks, about 35 new sites opened since the half-year and we are seeing good interest.
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that is translating into 17% increase in the sales rate per site, right across the u.k. anna: when we see glommy statistics for the month of july which says we saw the biggest drop in transactions in july since the 2008 financial crisis, is that a part of the country, the market that is far away from your business? jeff: it is not reflective of what we are seeing. nevertheless, we have not seen any real change in buyer behavior. people are still very keen to buy and the lenders are keen to lend. people understand the affordability is there. if you want to go into the housing latter, it is cheaper to buy than it is to rent at the moment. the fundamentals are still there. the overlying market is very
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strong and we have not seen any particular change in buyer behavior. anna: what about the change of availability of land for you to purchase or the price of the land? are you taking opportunity to buy land cheaper in the post brexit environment? jeff: over the last few years, we have put ourselves in strong position. we bought land at the right prices on good terms and we have a land bank with 93,000 plots in the short-term land bank. we are well-positioned in land availability across the u.k. yes, i think we see good opportunities to buy. we are keen to invest in the business as we see the market continue to be good. as long as the buyers are out there, we are keen to invest in further land for our business to push forward. anna: does it seem that you
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anticipate any slower rate of land purchase by a person in the future? jeff: i think transactions do change depending on the circumstances. planning is still difficult so we don't buy land until we have planning consent. over the recent years, we have had a rate of 150% of usage. in the first half of this year, we bought over 7000 plots which matches the completions we did. that as a matter of timing. we have good strategic land coming through where we are getting planning online that we have been promoting. i think we will see some good, bank as we the land move forward. sell on thekeen to land front and we want to buy. as long as we see the market holding up, we are keen buyers
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of land and investors in the business. anna: i saw a report from property week magazine. they were talking about the government setting up a fund to provide billions of pounds in loans to residential developers. must be working on it right now. what are you expecting in terms of support for your sector from the government? jeff: i think the sector has been well supported by the government, particularly the support for the first time buyers on help to buy and the wide market. i have not got any detail on what you refer to, but actually, there are good measures out there. we think as long as the transactions are there, we are keen to invest. we have a business which makes insulated panel systems which we
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build houses out of. i know that was another item that was mentioned, because it enables us to build quicker on-site and meet the demand we are seeing. i think we are investing in her business in any event, any further help from government in that regard will be welcomed. with the assistance that has been given over recent years. planning is still quite difficult. the planning system has been improved quite substantially over recent years, but actually, the practicalities of it in operation on the ground in the local authorities still needs to be speeded up. i think that would be really an area that i think we would like to see some further assistance. anna: if the government wants to focus on encouraging modular construction, building on site and add scale, a factory line
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production of houses, is that something you would welcome? jeff: i think it is an area we already invest in. last year, we built 6000 houses using our system. it is something we are very comfortable with. it works for us. maybe it could work for others. certainly, those techniques are already available, available to everyone. i think in this difficult time of resource, we are still finding it difficult to obtain the skills on site that we need. companies need to train, which we are doing, but i think some modular construction could be of help. anna: jeff, thank you for your time. jeff fairburn, the ceo of persimmon giving us great insight on how things are faring at the u.k. housing market now with the post brexit vote.
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the liveck in with action and get a sense of where we are opening up on equity markets. 51 minutes until the start of the european equity trading day. it will be a little more positive. the dax higher by 3/10 of 1%. let's bring in the risk trade. the asian equity session being led by what has been happening with the oil price. the asian equity market is entirely flat overnight. the oil prices down by 1.01%. the price retreating from seven-week highs. the prospect of increasing crude supply from nigeria and iraq continues to weigh down on the oil price. the dollar index there as well, responding to hawkish fed
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commentary yesterday. it were treated a little bit, down by 1/10 of 1%. considering the cost of keeping interest rates low, how that excessiveiving off risk appetite of investors. the new zealand-dollar is up. the governor haslam talking about that they will boost inflation but rapid cuts are not just about. here is shery ahn. trump has called for the appointment of a special prosecutor to investigate what he calls hillary clinton's e-mail crimes, stemming from her tenure as secretary of state. speaking at a campaign rally, trump focused on clinton's use of a private e-mail server and address and what he calls the pay to play actions of the clinton foundation. mr. trump: the amounts involved, the favors done and a
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significant number of crime that was done require an expedited investigation by a special prosecutor immediately, immediately, immediately. shery: meanwhile, hillary clinton's presidential campaign says donald trump's proposal to overhaul the federal tax and benefit high investors like himself. a member of her team says trump's plan pace to run up debt, not the other way around. officials-erian says need to consider the cost of keeping interest rates low. he told bloomberg there is a risk of financial instability down the road because of extraordinary monetary policy. he says it was the strongest argument for trying to normalize rates because otherwise the fed was contributing to excessive risk-taking. tokyo is cleaning up after the
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first typhoon to make landfall in the area in 11 years. it was class a category one storm with high winds and heavy rain. the airport was forced to suspend operations when the control tower was evacuated. 377 domestic flights were canceled. more than 70,000 passengers faced delays. ryan lochte is losing all of his endorsements after he admitted to making up a story about being robbed at gunpoint while at the real olympics. partnerships with companies. portiondonate a $50,000 of his pay to a charity that works with poor children in brazil. hundredses in china in of factories curving activity ahead of the g-20 summit next month to ensure blue skies when
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the red carpet is rolled out. oilay cut the country's demand by 250,000 barrels in the first quarter, according to industry consultant energy aspect. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg app. this is bloomberg. anna: thank you very much. we have the latest on the asian market session. the oil price in retreat, one of the factors that has been leading the direction of the trading day. juliette: that is right. we have seen quite a bit of weakness on the overall energy sector in asia, particularly those producers in hong kong. it has been one of the worst performers, china's biggest gas supplier. we have seen weakness coming through in australia in energy
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players but not enough to offset the 7/10 of 1% gain we have seen. you can see the likes down by 6%. the energy players underperforming. what else underperformed was the nike closing down by 6/10kei of ei closing down by 6/10 of 1%. there was a bit of a rally before lunchtime but they closed is in response to the yen strength. the market pretty disappointed the general did not talk about policy, particular after his comments over the weekend. there is chance of easing in september. he was talking at a seminar and only talked about the ip sector. a little bit of selling in terms of the dollar against the yen. new zealand close marginally
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high. we have seen outside on the shanghai market today. yesterday, a closed at its lowest level since august. there was quite a lot of outflows in the equity market with the anxiety coming through from some of those funds. showing you the strength in the yen, up to tens of 1%. performer, up 7/10 of 1%. graham wheeler said there may be more rate cuts in new zealand but it would be very rapid. anna: thank you. -- that isur loss the german chancellor's message to the u.k. post brexit vote. we have the meeting between the three. this is bloomberg. ♪
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anna: welcome back, everybody. this is countdown.
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a beautiful morning across london. 7:19 here. we are seeing the pound trade a little stronger against the dollar. how it fares against the euro and where it goes from here. angela merkel says the eu needs it can work without the u.k. comments at a news conference as they chart the way ahead. matteo renzi spoke about the priorities of eu integration. after brexit,t europe was over. it is not true. we respect the british people's choice but i want to write a few to chapter and that is why external and internal security to fight for common defense, collaboration, better integration in the national defense industries -- european community security are all
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priorities in which we will discuss. anna: let's get more from caroline hyde in berlin watching the moves of angela merkel and the other leaders. a future chapter being called for by the italian prime minister. caroline: as always. this is meant to be a show of ofty ahead of the meeting the 27 remaining eu countries later in september. ahead of that, really showing the path forward. prosperous and say is what angela merkel was calling for. a show of unity aboard the anti-craft carrier based in italy helping rescue refugees. they stand together in the migration problem, against terrorism which has been affecting france and germany. this symbolism of a meeting
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shows some of the division. they went to visit an anti-fascist prisoner, the grave of the man, which the eu was based. his vision was one of no borders, a federal state. that is not the way the eu is going because we can see the vision from the banking union that has been called for. reticenttself are very about the insurance of all bank deposits. that is contained in that vision. italy desperately trying to sort out the low performing loans in italy. germany wants them to stick to the banking bailout rules. that will be in issue as is the the fiscal rules that surrounds the eu. you have germany and france and italy calling for growth to suppress some of the populist parties growing in the country's. ies.
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the national front in france rearing its head, calling for a backing away from the eu. notable differences. merkel raised the fact that was difference of opinion in eu country. >> as much as we like brussels, we can come again for visits of individual member states to inform ourselves and make clear there is big diversity and the common ground in which this european union consists of. anna: thank you very much. angela merkel speaking there and caroline hyde joining us. mike bell is still with us in the studio. i have a map courtesy of my friends from bloomberg intelligence which shows the high risk, political tensions stocks for the european project right now. the focus is very much on italy, the constitutional referendum
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that will take place in october. it is a test of matteo renzi's leadership. as these three leaders meet to set a course without a u.k., what do you think of their chances? mike: the fact renzi seems to be distancing himself from a notion that if he loses the referendum that he would have to resign. given that the polls are close, swinging this way and that, it is hard to predict what the actual outcome will be. the fact he is pushing back from previous comments that he would resign if you lost is a positive, because if we lost renzi from italy that would put italy into a period of political confusion which would be worrisome for markets. anna: it has been fairly resilient in the face of brexit but u.k. data has been fairly resilient. so far, you're skeptical on whether that will continue? skeptical about the
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fact that you can't economy will continue to show the signs at the moment. if you look at the pmi data of the u.k., it absolutely fell off a cliff. compare that to the european data which has held up relatively well, and what you are seeing is the concerns around brexit seem to be localized to the u.k. that suggest even though the u.k. economy continues to do relatively well at the moment, you should see a sharp slowdown and domestic growth in the u.k. in europe, it is dependent on the numbers we get late this morning, but it looks like you have not seen the confidence the same. anna: even with the plunging confidence, is there reason to wonder whether that is really true outside london and the metropolitan bubble that we perhaps exist in? the persimmon ceo telling us buyers are keen to buy houses,
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but they anticipate good sales. mike: in the housing market, there is the big differential between london and outside of london. prices in london rocket upward since the crisis. many are 50% higher than they were in 2007. if you look outside of london, many regions of the country where they have not recovered to the prices. if you look across the country as a whole, very is measures show a sharp slowdown. you can see the confidence across the country is falling. it has fallen quite sharply. very us measures -- various measures from the service pmi having fallen very sharply. this is correlated with a sharp slowdown in u.k. growth. it is that seem to be feeding through into europe which is important. anna: thank you for joining us this morning. great to have your thoughts,
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mike bell here on countdown. that is it for countdown. on the move is next. hyde cranny and caroline will kick off the conversation. this is bloomberg. ♪
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manus: welcome to "on the move." 7:30 a.m. in london, 8:30 in berlin. we are counting down to the european market open. alongside me is caroline hyde. i'm manus cranny. life after brexit. german, french, and italian leaders lay out their views on the way forward after the u.k.'s vote. matteo renzi says europe is not the cause of all problems, for the solution. a strong foundation. pretax profit at persimmon rises nearly 30% in


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